GE revenue falls short, shares down

By Scott Malone

BOSTON (Reuters) - General Electric (GE.N) said profit fell by almost half, on a deeper drop in revenue than Wall Street expected, as the slump that has gripped its finance and media businesses took hold of its heavy industrial units.

The largest U.S. conglomerate, whose shares fell 3.2 percent in premarket trading, reported earnings that topped Wall Street's expectations, but posted a 17-percent drop in revenue that was far deeper than the 10-percent decline analysts expected.

Earnings tumbled at all its businesses except for the energy infrastructure unit, which makes equipment including electricity-producing turbines and gear used in oil and gas production.

GE's second quarter net income came to $2.67 billion (1.63 billion pounds), or 24 cents per share, compared with profit of $5.07 billion, or 51 cents per share, a year earlier.

Profit from continuing operations came to 26 cents per share. On that basis, analysts on average had looked for 24 cents.

Revenue fell 17 percent to $39.08 billion. Factoring out fluctuating exchange rates, revenue would have fallen 12 percent.

"Hitting the bottom line number was pretty good news, but that top line revenue, that's a big miss," said Peter Sorrentino, senior vice president and portfolio manager at Huntington Asset Advisors in Cincinnati, which owns GE shares. "For them to come in at the $39 (billion revenue) range, that was definitely disconcerting."

GE's size and the scope of its operations -- which range from commercial lending to building railroad locomotives to running the NBC television network -- make it a bellwether of the world economy, which is facing a brutal recession.